Market News and Charts for December 10, 2020
Hey traders! Below are the latest forex chart updates for Thursday’s sessions. Learn from the provided analysis and apply the recommended positions to your next move. Good day and Good Luck!
The pair failed to break out from an uptrend channel resistance line, sending the pair lower towards its previous low. The Japanese economy expanded by 22.9% in the third quarter of fiscal 2020 on an annual basis. Meanwhile, GDP grew by 5.3% QoQ. The percentage of private consumption to GDP also increased by 5.1% compared to the second quarter’s -7.9%. These figures were able to beat consensus estimates leading to investors into believing that the worst might be over for the third largest economy in the world. Aside from the recently reported numbers, investors are optimistic with the signing of RCEP (Regional Comprehensive Economic Partnership). The new trading bloc includes Japan and China. Together, they cover around 30% of the global GDP. Japan is expected to benefit from the bloc with the increasing pivot of the economic powerhouse to the Asia Pacific. On the other hand, the Canadian dollar will underperform until the end of 2020.
The pair is expected to break down from a key support line, sending the pair lower towards March 24 low. The UK made history on Tuesday, December 08, as the first country to administer COVID-19 on its citizens. Goldman Sachs has quickly revised its forecast to 7.0% expansion by 2021. However, there are still some concerns not only in the safety of Pfizer-BioNTech vaccine but also on the looming deadline of the Brexit transition. In addition to this, the recently published reports from the United Kingdom suggests a slowdown in the economy. GDP MoM advanced by mere 0.4%, the lowest in the past six (6) months. Trade deficit has also widened to -12.00 billion, down from -9.35 billion in September. As for the Brexit negotiation, experts believe that the UK will not win neither from making a concession from the deal nor accepting a no deal Brexit. Brexit is expected to cost the British economy by 25 billion pound in 2021.
The pair is expected to break out from a major support line and reach a low last seen in January 2018. The European Central Bank (ECB) held onto its rates for interest, lending, and deposit. Figures came in at 0.00%, 0.25%, and -0.50%. These figures mean that banks charge money to customers by depositing money into their accounts. Meanwhile, the interest from lending encourages expansion of businesses and the interest rate gives commercial banks a 0.25% spread from their lending activity. Despite retaining these rates, the central bank along with the European Commission continues to inject money in the Eurozone causing the value of the single currency to decline. On the other hand, the outlook for the Australian economy was bright based on the recently published reports. Westpac Consumer Sentiment edged higher by 4.1% on Tuesday, December 08, for the month of December. The previous record for the report was 2.5%.
The pair will continue to move higher in the following days after it broke out from a major resistance line. The US initial jobless claims report on Thursday, December 10, posted 853,000 results, the biggest weekly increase since the third week of September. The increase in the number of unemployment benefits claimants suggest the worsening impact of the third wave of coronavirus in the United States. On Friday, December 04, the country reported the biggest single day increase in COVID-19 infections at 229,243. Currently, there are a total of 15.5 million infected individuals in America. On Friday, the NFP result was also published. The figure for the report was 245,000 jobs addition, which represents a 60% decline from the prior month’s report of 610,000. The disappointing result is expected to pressure the US government to pass a new stimulus program to minimize the impact of the pandemic in the world’s largest economy.
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